PE Players Getting More Collaborative in Home Care Dealmaking

The recent upswing in home care dealmaking activity driven by private equity continues. It appears PE buyers are starting to get more collaborative, too.

On Tuesday, a consortium of private equity firms came together to acquire Aging With Comfort, an independently owned Philadelphia-based home care agency that provides personal care assistance for elderly and disabled clients. Terms of the transaction were not disclosed.

The several buyers — acting through a small business investment company known as SBIC Capital Syndicate Partners — include Capital Alignment Partners, NewSpring, Petra Capital Partners and Tecum Capital. To pull off the deal, the consortium worked alongside Silver Palm Capital Healthcare Partners.

Established in 2014 by Neritan and Gentiana Canole, Aging With Comfort delivers non-medical home care services across four Pennsylvania counties. In addition to companionship, light housekeeping, transportation and other core home care services, the provider operates an in-home specialty program for individuals with intellectual and developmental disabilities.

Aging With Comfort is helmed by CEO Besmir Kripa, who hinted at forthcoming growth plans following the PE takeover.

“Amid the COVID-19 pandemic, many older individuals and those living with disabilities feel much more comfortable receiving care at home, and Aging With Comfort remains dedicated to providing the highest standard of reliable and quality home care,” Kripa said in a statement. “With the support of our new investment partners, we are excited to grow our business and extend our services to more individuals in need.”

Over the past few years, Aging With Comfort has grown into one of the largest and fastest-growing home care agencies in Pennsylvania.

A big key to its success has been its contracting ability. Currently, the provider has home-based care contracts with all three managed care organizations in the Philadelphia market: Keystone First CHC, PA Health & Wellness and UPMC.

The private equity buyers were also attracted to Aging With Comfort due to Pennsylvania’s aging population and limited nursing home capacity in the state.

“As the home continues to grow in popularity as the preferred site of care for millions of Americans, Aging With Comfort allows elderly individuals and those living with disabilities to live comfortably in their own residences,” Capital Alignment Managing Director Drew Healy said in a statement. “As this trend continues to unfold, we’re excited to partner with Besmir and his team, with the help of NewSpring, Petra Capital Partners, Silver Palm Capital Healthcare Partners and Tecum Capital to help Aging With Comfort continue to expand into new markets in Pennsylvania.”

As part of the transaction, representatives from each investment firm will join the Aging With Comfort board of directors.

Nashville, Tennessee-based Capital Alignment Partners is a lower-middle-market private investment firm that provides debt and equity capital primarily to health care and business service companies. Meanwhile, the Radnor, Pennsylvania-based NewSpring has invested well over $1 billion since inception.

Also based in Nashville, Petra Capital Partners’ sweet spot is the gap between venture capital investors and middle-market buyout groups. On its end, the Pittsburgh-based Tecum Capital typically invests $5 million to $20 million in potential portfolio companies.

Silver Palm Capital is a private investment firm based in South Florida.

In the past, it was common to see one PE buyer come in and acquire a home care asset on its own. In recent years, though, the consortium concept has become more popular for a variety of reasons.

For starters, home care organizations are starting to sell for all-time highs, so a group of buyers could simply help lighten the load.

Additionally, most buyers now go into a home care deal hoping to grow that acquired business into a larger platform company. In joining forces with other buyers, they may see a longer runway to do just that.

Other recent examples of this trend include Centerbridge Partners and The Vistria Group teaming up to purchase Help at Home from Wellspring Capital Management in November. Blue Wolf Capital Partners similarly teamed up with Kelso & Company to create what would ultimately become Elara Caring in 2018.

It’s also possible that PE firms are being forced to team up because there is a supply and demand crunch in home care — several interested buyers for not that many sellers.

“The pandemic has really brought even more to light that many people want to be out of the congregate settings, that they would prefer to be in their home,” Les Levinson, the co-chair of the transactional health care practice at Robinson & Cole LLP, previously told Home Health Care News. “The desire and ability to get treated in the home, I think, is really inspiring additional private equity interest in the space, particularly from players who might not have been active before.”